Innovation management

Ce papier a fait l’objet d’une communication dans le cadre de!la :
12th International Conference on Management of Technology!: IAMOT, 13-15 May 2003, Nancy - France
Innovation management : how this recent
and recurrent activity is integrated
into company structures and processes
Thierry GIDEL1, François ROMON2
Université de Technologie de Compiègne – Laboratoire Conception et Qualité des Produits et
Processus (LCQP2) – BP 60319 – 60203 COMPIEGNE CEDEX FRANCE
Tel: 00 33 (0)3 44 23 52 10 - Fax: 00 33 (0)3 44 23 52 12 - [email protected]
2
Université de Technologie de Compiègne – Laboratoire Conception et Qualité des Produits et
Processus (LCQP2) – BP 60319 – 60203 COMPIEGNE CEDEX FRANCE
Tel: 00 33 (0)3 44 23 46 13 - Fax: 00 33 (0)3 44 23 52 12 - [email protected]
1
ABSTRACT
Achieving a continuous flow of successful new products on the market is becoming a major stake for companies.
For this reason, companies are implementing structures, methods and tools dedicated to innovation management.
In this paper, we present some general and non-confidential results of the research we have carried out to
compare the innovation management practices of five French companies in different sectors of activity (civil
engineering, food industry, building materials, road building and aeronautics).
Firstly, we argue that the project portfolio is the relevant link between the strategic and operational processes of
innovation management. Then, we point out that the better the permanent and temporary structures of
innovation are integrated into the company's business structures, the more efficient innovation management is.
Finally, we notice that the compatibility of the tools dedicated to portfolio management with those dedicated to
the management of projects is far from being satisfactory yet, in the companies we studied.
As a temporary conclusion we built a typology of the innovation management situations associated with a model
in order to evaluate and improve on the innovation management methods and tools already implemented.
KEYWORDS
Multi-project management, project portfolio management, innovation capacity, model of process.
1. INTRODUCTION
We are going to begin by presenting the model of innovation on which we have based our
research and next we will present the concept of innovation backing (IB) and its underlying
processes and structures.
Secondly we will present the research protocol and the companies that took part in the
comparative study on Innovation Project Portfolio Management (IPPM) on which our research is
based.
Thirdly we are going to present the principal findings of our research under four headings:
- Innovation Project Portfolio Management (IPPM) tools, which we have classified in terms
of the final function that was attributed to them by the companies that took part in the study:
reporting, evaluation of projects for assistance in operational decision-making and for
assistance in strategic reflection,
- the strategic processes of innovation backing,
- the operational processes of innovation backing,
- the structures supporting these processes.
We have observed that the strategic processes are essentially dedicated to the organisation of the
selection of the most profitable projects, but also on the construction of project portfolios and modes
of decision-making that are coherent with the company's innovation strategy. We demonstrate the
10ième Séminaire CONFERE, 3-4 Juillet 2003, Belfort – France, pp. 273-283
way in which operational processes enable the optimisation under constraints of the realisation of the
projects in a portfolio. We then present the structures that support the processes of Innovation
Backing by evoking the different types of groups of projects and the interactions between management
structures and management of the portfolios.
Lastly, we conclude by presenting the key points emanating from this research, the contributions
and limitations of innovation project portfolio management in innovation backing.
2. DEFINITIONS
We define innovation, at individual project level, as the process that leads to the offering of a new
product or service, or process. At company level, we define innovation as the sum of innovation
projects that the company implements in order to increase its competitiveness in changing markets.
We define innovation backing (IB) as the sum of decisions to be made during the successive
phases of innovation, and at the different levels where the phenomenon takes place in the company (cf.
Innovation Management Matrix Model, I3M, figure 1):
• at each innovation project level (operational level),
• at corporate technological resources level (instrumental level),
• at sum of all innovation projects level (executive decision-making level).
Innovation Management Matrix Model (I3M)
I - Emergence of
ideas
Define and lead
All
I n n o v a t i o n the company's
innovation
Projects
policy
Company's
techno -logical
resources
Individual
innovation
projects
II - Maturation of
potential
projects
Decision to
launch projects
Mobilise the
generic
technologies for
the axes of
innovation
Evaluate the
technical
feasibility of
potential
projects
Identify
opportunities
for new
business
Verify the
economic
relevance of
potential
projects
III - Definition of
the project
Deploy the
resources
necessary to the
projects
Master the key
technologies for
the projects
Organise the
execution of the
project
IV - Steering of
the project
Supervise the
execution of
innovation
projects
Implement and
capitalise the
required project
technologies
Steer the
execution of the
project
Figure 1: Innovation Management Matrix Model I3M (Romon, 2000).
In this model, we focuse on innovation management decision-making, which we have analysed
from 3 angles:
The first group of processes of innovation backing concerns corporate innovation strategy
(figure 2):
• decision to invest in one or other targeted market, one or other key technology, in one or other
function that is particularly important in the construction of the company's value chain (strategic
analyses, definition of axes of innovation, definition of project selection criteria, management of
patents, modes of financing),
• mobilisation of initiatives to encourage the emergence of innovation projects.
We have coined these the strategic innovation backing processes. They are essentially based on
research and the processing of relevant information, and on the modalities of decision-making.
The second group of processes in innovation backing concerns the efficiency of innovation:
• evaluation and selection of projects,
• monitoring of the effective execution of projects, respecting the specifications, budgets and time
allocated, in the light of the resources available and the variations encountered (reporting,
adjustments)
We have coined these the operational innovation backing processes. They are essentially
based on the definition of procedures and the implementation of management tools.
274
Innovation Backing (IB) Process
Strategic IB Processes:
• Define the corporate axes of
innovation
• Encourage emergence of
innovation projects and define
the criteria for their management
Operational IB Process:
• Evaluate the projects
• Decide which projects to launch
• Supervise the execution of
innovation projects
Organisational IB Structures:
• Permanent: R&D centres, innovation platforms, strategic
committees, themed networking, knowledge bases, scientific
committees...
•Evolving: Project teams, steering committee...
•Innovation project portfolios (IPP)
Figure 2: Processes and structures of innovation backing
These processes of innovation backing can only be effectively implemented if they are supported
by specific organisational innovation baking structures, suitable to encourage the emergence of
innovation projects and ensure their successful completion. The organisational structures are the
differentiated units within the company, the functional organs, the process support systems.
These structures take two forms:
• permanent structures uniting human, financial, technical and information resources, dedicated to
the overall process of innovation (R&D centres, marketing departments, strategic innovation
committee, programmes, knowledge bases)
• evolving structures, uniting the resources affected to innovation projects (project teams, steering
committees, themed networking).
We start from the following systemic hypothesis: the different processes of innovation backing are
interdependent, both of the management of the company as a whole (marketing, R&D, business units),
and of individual innovation project (Loilier and Tellier, 1999).
The problems that beset innovation backing can then be formulated: what instances, what modes
of decision-making, are the most appropriate for the exercise of this responsibility within the
company, what methods and what management tools are the most efficient for the persons concerned
(those bearing the projects, but also those who provide resources for the projects, and those who work
the projects out).
This set of problems is crystallised in the management of the company's innovation projects
portfolio(s), which are the interfaces between the backers of innovation and innovation project
managers in the company.
We have defined a project portfolio as a set of projects taken as a whole and recognised as such
for management purposes.
The management of a portfolio corresponds to its constitution and its structure, and to the
arbitrage that it enables to be made between the projects that it contains, at any given moment, and as
and when the projects progress.
275
3. COMPARATIVE STUDY OF INNOVATION PROJECT PORTFOLIO MANAGEMENT
(IPPM) IN FIVE MAJOR FRENCH COMPANIES
In this article, we present the principal results of a 3-year comparative study on Innovation Project
Portfolio Management (IPPM), which we carried out in five major French companies, specifically
chosen from very different sectors.
• Liebherr Aerospace Toulouse (LTS): In-cabin air treatment systems for aircraft, air
conditioning, pressurisation, anti-icing
• SODIAAL (Yoplait): Fresh diary products, drinking milk, cheeses, food ingredients
• Rhodia: Speciality chemicals, polyamide, products for industrial goods and consumer goods
• Lafarge Mortiers: Special mortars, products for facades, tile-fixing adhesives
• Entreprise Jean Lefebvre EJL (GTM): Road building, road building materials
Research was carried out in three phases:
• in-depth interviews with the five persons who commissioned the study, namely the directors
of R&D and Innovation from each of the 5 companies,
• in-depth interviews with forty or so of the persons directly involved in innovation, analysis of
IPPM documents and tools, case studies,
• comparative analysis and synthesis,
by three researchers, Sandrine Fernez-Walch (Université Toulouse 1), Thierry Gidel and François
Romon, the authors of this article.
For the purposes of this comparative study, we consider as a priori variables of action, the
innovation structures, the modes of decision-making, the innovation management tools, in accordance
with the "innovation grid" developed by Sandrine Fernez-Walch (1991), and already used in previous
studies (Fernez-Walch and Romon, 2000).
The commitment to confidentiality that we entered into with our partners, prevents us from giving
any details of the innovation projects currently in progress, neither can we identify any element of our
study with one or other of the five companies studied.
4. WIDE VARIETY OF IPPM TOOLS AVAILABLE, BUT DIFFICULTIES IN
IMPLEMENTATION
IPPM tools are often of a relatively simple design. The principles used have been in existence for
many years: the theories of decision-making in uncertain situations were developed in the 1950s, those
on the financial analysis of research investment date from the 1960s and 1970s and the tools based on
the value of information were inspired by work carried out in the 1980s.
Several typologies can be used to classify these tools. We chose to classify them in terms of the
three principal objectives attributed to IPPM tools by the companies taking part in the study. Indeed,
IPPM tools are used as: a means of control (Reporting tools), an aid in the choice of projects and their
management within the portfolios (tools to assist in operational decision-making, and scoring tools) or
as an aid to collective reflection (Tools to assist in strategic reflection on innovation).
Reporting tools
The objective of this type of tool is to provide the decision-makers with answers to questions of
the type: Are we running sufficient innovation projects? What is the coherence between innovation
projects and strategy? Are the programs correctly executed?
E.g. a R&D and Innovation activity report contains: the budget for the innovation unit, both the
forecast and actual R&D budget, the percentage of both scheduled and actually executed actions, an
evaluation of the R&D effort (measured in % of R&D expenditure in relation to turnover and net
earnings), an evaluation of the "efficacy of research" in terms of the number of patents and brands
registered, the number of communications diffused, the number of experimental sites, R&D
partnerships (universities, companies), a statement of the portfolio of patents and brands.
Tools to assist in operational decision-making in the framework of project portfolio
These tools are designed to assist in the "everyday" steering of projects, i.e. in decision- making
relative to the advancement of projects in the portfolio, in the filling up of the portfolio (launch or
scrapping of projects, postponement, merger of projects, putting projects on hold), in the affectation of
resources to each project in the portfolio.
276
In the companies studied, we found tools in the form of lists of projects classified by categories
and associated with certain characteristics or attributes of the projects:
• list of projects in progress with project name, project manager, team, key dates, action
undertaken (whenever a product related decision is made, an additional line is completed),
• Gantt chart, showing the key stages and rate of progress of the project, together with
complementary information (manager, team, budget forecast and actual budget),
• list of the projects in progress, in a more literary format (description, type, principal
constraints of the project, history of decisions made and tasks carried out).
• table of the projects in progress, summarising the monitoring and achievement indicators of
each project.
Publications do not speak of management of projects simply by list (indeed they speak extensively
of more sophisticated tools such as "pipes" and "scoring", see below). Nonetheless, we observed the
widespread use of list of summaries in four of the five companies that we studied, in spite of the
apparent difficulties in using them (they contain on average 11 columns and as many lines as there are
projects, sometimes more since they can comprise several project classifications or segments of one
portfolio, and/or contain historical information).
Certain companies use a system of automated reporting, supported by project management
software.
Tools for the evaluation of projects and potential projects, scoring tools.
Some of the companies studied have sought to develop performance indicators for each project or
for a set of projects: added-value, volume of sales (as a percentage of the company's turnover) of the
products launched in the last 3 to 5 years, staying power of the new products (out of x products
launched in the last 3 to 5 years, how many are still around?), ROI (Return on Investment), time-tomarket, respect of procedures, number of projects (in a given period, per Business Unit, or per R&D
centre), contribution of the set of projects to the target fixed for the business unit or company as a
whole (extension of product range, cost reduction, improvement in product quality, respect of the
environment).
Within a portfolio, financial appraisal tools are used to compare the results and the forecasts of
each project: for this reason, they can not generally be used to study the possible synergies between
projects.
The point that is common to all these financial tools is their dependency on forecasts and
estimates, in particular for the evaluation of forecast income to be generated by an innovation project,
and the size of the investment to be made (see above).
This type of tools occupy more space in publications (Remer and Nieto, 1995, Lefley and Morgan,
1998, Akalu, 2001) than in the companies we studied, with the exception of one company, which
makes a striking contrast as it has made substantial inroads into this domain with the help of external
consultants. This situation is all the more remarkable given that, in all the companies, the line taken at
managerial level maintains that the financial profitability of projects is the top priority in Innovation
Management.
Multi-criteria or scoring tools enable the evaluation or rating of projects for comparison purposes.
This scoring is done using questionnaires to be completed by the project manager. There are abundant
publications on scoring tools (Calantone et al., 1999) for example:
• Financial Appraisal Profile (FAP), a strategic index based on 9 criteria per team of managers
in order to reduce subjectivity (Lefley and Morgan, 1998)
• Strategic Justification of Enterprise Technology (SJET), a bi-dimensional matrix juxtaposing
the strategic direction of the company and the measurable characteristics of the project (Sarkis
et al., 1997)
These multi-criteria analysis tools and methods are frequently criticised because, by reducing the
project to a score, they prevent learning and feedback, they are deemed "not good for learning".
Strategic Reflection Tools
These tools are designed to promote collective reflection on the coherence of projects within the
portfolio, and on the innovation policy of the company, and to stimulate work on the definition of the
contours of portfolios. They introduce criteria of interaction between projects into the portfolios. By
277
representing them on one diagram, they serve also to challenge the criteria of prioritisation of projects
or to underline the strategic axes of innovation.
There are plenty of examples of matrixes in publications, such as benefits versus probability of
success, ease of implementation versus attraction. The projects are represented on graphs with bubbles
of different colours and sizes (De Maio et al., 1994, Cooper et al., 1999, Archer and Ghasemzadeh,
1999, Mikkola, 2001). We found this type of tool in use in two of the five companies in our
comparative study. The matrixes are essentially improved versions of the Boston Consulting Group
(BCG), and GE/McKinsey type of matrix, which had been designed to allocate the company's
resources among its different Business Units.
The mapping of projects is used for the allocation of resources to the different projects in a
portfolio. Bubble graphs enable the instant visualisation of numerous parameters, up to 6, which
facilitate the introduction of key factors such as the dynamics of the portfolio. These graphs are
generally produced to encourage debate, analysis and questioning of established thought.
Combinations of matrixes and bubble charts with additionally the notion of time, and pipes enable the
visualisation of all the projects in progress with diverse attributes, and in relation to their advancement
in time.
Difficulties associated with implementation of tools and learning IPPM
We observed that the tools currently available are difficult to implement. There seem to be three
principal reasons for this difficulty:
• data gathering is far from being easy,
• the data is unreliable or too subjective,
• staff is neither ready nor trained in the use of this type of tool.
The difficulties in the implementation of this type of tool are also due to a lack of clarity and
stability in the objectives they should help to achieve.
We observed three types of lever, used to introduce the concepts, the tools and methods into the
corporate culture of the enterprises that took part in our comparative study:
• formalisation of tools and methods in guides and procedures, all the companies that took part
in our study have formalised their functioning, either in quality procedures (in the framework
of ISO 9001 certification, or equivalent), or in an in-house document.
• organisation of training programs; all the companies provided training with relatively similar
content.
• creation of in-house Innovation Project management consultant positions.
5. STRATEGIC IB PROCESSES
The strategic processes involved in innovation backing (IB) have to be defined from the starting
point of the strategic configuration in which the company finds itself and its development. In order to
achieve this, we elected to use the concept of the strategic intensity of innovation in the company
measured by a mix of three criteria:
• fit between innovation policy and corporate policy,
• innovation policy formalisation,
• percentage of the turnover dedicated to R&D
The strategic processes subsequently consist of the construction of the company's axes of
innovation, i.e. the definition of the role that has to be attributed to innovation so that the company
can draw the maximum benefit from this strategic configuration; then they enable the elaboration of
the project selection criteria.
But the strategic processes of IB do not end with a simple prescription. We include in the strategic
processes of IB, all the actions that have to be carried out in order to realise the change that involves,
at differing degrees, the fact of determining the axes of innovation and the criteria of selection.
Below, we expand, in particular on the construction of project portfolios and the formalisation of
the modes of decision-making in IPPM in coherence with the company's axes of innovation.
278
"Strategic Intensity of Innovation" concept
Lenfle and Midler (2002) demonstrated, using the USINOR case study, that "whilst it is easy to
circulate relatively fuzzy managerial concepts such as 'project management', the reality of their
translation into concrete fact offers poor resistance to differences in situations".
The analysis of the strategic configurations of the 5 companies studied, led us to classify them in 3
levels of "strategic intensity of innovation" (Table 1)
Table 1: Strategic Intensity of Innovation
Level of strategic intensity of innovation
Innovation is the foundation of the offer
Companies
concerned
1
Innovation is a variable yet determining factor of the offer
2
Innovation is just one of several factors of competitiveness
2
Our research demonstrates that the strategic IB processes bear a strong correlation, on one hand to
management practices in the company and its organisation for ordinary operations (and not for the
finalities of innovation management per se), and on another hand to the strategic intensity of
innovation within the company.
Construction of axes of innovation and project selection criteria
Hatchuel, Lemasson et al. (2002) resting notably on the TEFAL case, which demonstrates a high
capacity for successful innovation (Chapel, 1997), advocate the implementation of a " collective
process of innovation".
The decision-making processes of IPPM with a strategic finality that we observed are:
• emergence of corporate axes of innovation
• definition of criteria of selection, prioritisation and termination of projects in the portfolio
(evaluation of performances and potentialities of the portfolio in relation to the company's
axes of innovation)
• definition of the level of precision of the specifications entrusted to project management
• elaboration of management's reference framework of the company's technological resources
(general orientation of technological watching brief, industrial property, R&D program,
knowledge management)
However, we have observed that the strategic IB processes are essentially dedicated to the
organisation of the selection of the most "profitable" projects.
There is no shortage of ideas; on the contrary, the problem is rather to sort through them in order only
to transform the "best" ideas into projects that will be included in the project portfolios. In the context
of cost reductions, our research demonstrates the major importance of the "sorting through ideas"
function, whilst noting a great deal of uncertainty as to the way in which this function is ensured. For
example, none of the persons using scales of priority gave us an explanation of their mode of
construction.
The evaluation of the potential profitability of a project in an uncertain context is the principal
difficulty in the selection of projects. However, the backers of innovation need to know what income
the innovation projects are going to generate. Classes of priority reflecting an evaluation of the
balance between risk/expected gain and/or appropriateness of the projects to the company's strategy
are drawn up. For the system to work, innovation decision-makers need to have clearly formulated
and expressed their innovation strategy, and the allocation of the innovation budget between
groundbreaking projects and development has to be coherent with the sorting of ideas, instead of
preceding it as is often the case.
Construction of project portfolios coherent with the company's axes of innovation
We are raising, in this paper, the problem of the suitability of the very construction of project
portfolios with the strategic functions of IPPM, i.e. the capacity to manage innovation projects along
the axes of innovation set by the company:
279
relationship between the profiles of the portfolios and the profiles of the structures for the
working out of the projects (permanent structures such as research centres, as well as
temporary project research platforms), and for the structures for the exploitation of the
products of the projects (Business Units)
• segmentation of the project portfolios.
Bower and Christensen (2000) demonstrated, using very convincing examples form the field of
microelectronics, that letting oneself be guided in the definition of one's R&D axes, entirely by the
demands of the current clients, risks leading to a poor adaptation of the company's technological
resources to the future evolution in demand.
Important progress can be made in the domain of innovation backing, by cross referencing within
project portfolios, the types of corporate strategy and the types of innovation projects (Gidel and
Romon, 2002). This is evidently the objective of the multi-criteria evaluations conducted within the
project portfolios that we studied (see above IPPM tools), but these evaluations are conducted within
portfolios constructed around other profiles, and in other segments than those of the axes of innovation
(often around the profiles of the business units): projects are ultimately only managed within the
framework of criteria that belong to this pre-established profile, and not within the framework of
strategic innovation management criteria.
Formalisation of IPPM decision-making modes coherent with the corporate axes of innovation
On of the major problems of IPPM, in relation to its strategic finalities, is that of the modes of
decision-making and first of all, the parties involved in decision-making: are they the ones in the best
position to assume this responsibility? The modes of decision-making have to bring together the
backers and managers of innovation within the company. As stated also by Bower and Christensen
(2000) "most strategic innovation proposals come to light …from within technical teams or project
groups. Companies subsequently use analytical planning and budgeting systems to choose from
among competing projects". This is the procedure effectively institutionalised by one of the
companies that took part in our study, where the projects in progress are systematically and
periodically presented by project teams, first to business unit management and then to company
management.
•
6. OPERATIONAL IB PROCESSES
The operational processes behind innovation backing are principally based on the definition of
procedures and the implementation of management tools. In terms of IPPM, the operational processes
of innovation backing are essentially dedicated to optimising, within the constraints, the
realisation of the projects in the portfolio.
Many publications advocate the management of the interactions between projects, but what we
observed is different: portfolios are used more to optimise the running of the projects, within the
constraints, than to manage their interactions.
For companies that develop their own products, the rapidity of the time to market is an important
criterion. For companies that respond to client demand, it is a question of respecting the client's stated
schedule, in these cases IPPM directors play a "super-supervision" role in keeping the projects onschedule.
For companies that respond to client demand, cost overruns are tracked as they often reveal
planning discrepancies, organisational problems with an impact on project profitability, which are
managed in a target cost framework to a maximum number of projects into the portfolios while
respecting the overall budget allocated.
In the context of a chronic lack of human resources, conflicts of priority are numerous and
resolved as and when they arise. One function expected from IPPM is the ability to arbitrate between
projects, taking into consideration the quantity and quality of resources available. The consequence of
this optimisation within constraints is that one is less interested in the portfolio as an entity than in the
separate individual projects.
In cases of conflict of priority, the "negative" interactions between projects outweigh the synergies
between projects.
280
We observed a few tentative moves to create databases to capitalise on knowledge and expertise or
consolidations of portfolios. But we observed neither the bartering reported by Bonhomme and Midler
(1999) in the case of a pharmaceutical laboratory, where it is possible, at any given moment, to
exchange a project in a portfolio with one from another portfolio, nor the sharing of vital common
components among projects being developed on a common platform as described by Cusumano and
Nobeoka (1999).
7. STRUCTURES SUPPORTING THE IB PROCESSES
The implementation of a IPPM system is a voluntary move, either at the initiative of R&D
management, seeking to justify their request for the allocation of resources, or at the initiative of
Executive Management imposing it as a precondition for the attribution of these same resources. In
either case, the stated objective is to "orient" the R&D programs towards the satisfaction of clients'
needs, we will therefore seek to associate marketing with R&D management: a way of fully
integrating innovation into the normal functioning of the company.
Having presented the different types of sets of projects encountered during our research, we now
illustrate the interactions between structures and sets of projects.
The different types of sets of projects
Projects are grouped according to their related attributes. In our comparative study, we distinguish
between several types of sets of innovation projects:
• project portfolios (PP), comprising a set of projects, and managed as such,
• "operational" classifications of projects (OCP), sets of projects, formalised and instrumented,
but which are not managed in themselves: it is the projects that fall under this classification
that are managed, contrary to project portfolios,
• "conceptual" classifications of projects (CCP), sets constituted as the opportunity arises,
simple lists of attributes given to projects, either orally, or in writing (e.g. identification sheets
and/or project monitoring sheets), to communicate on projects or to occasionally assist in
project decision-making, but are not a stable management procedure.
The construction of portfolios and "operational classification" of innovation projects cover two
aspects: the definition of the boundaries of the set of project and, if appropriate, the segmentation of
the different projects within this set.
Interaction between corporate structures and project portfolio management
"Operational" classifications generally regroup projects outside portfolios but can also include projects
included in a portfolio: we therefore observe overlaps between the boundaries of sets of projects,
which can obviously lead to dysfunction: a project can be the object of conflicting decisions, made at
two separate times and places.
In our opinion, the proliferation of this type of classification occurs in different circumstances:
• project portfolios and management structures have not yet settled into place or are in a process
of reorganisation and the classifications are temporary solutions
• the company has yet to adopt a genuine project portfolio management system, but nonetheless
has to manage the projects: the classifications are de facto project management tools
• there is disagreement among innovation staff over the management of the portfolio(s), and the
operational classification is a means of opposition or at the least a way to circumvent the
decisions made at portfolio level or within the existing structures.
We also found projects outside any set, and "reserved" budgets that were available to Executive
R&D Management. These "exceptions" enabling staff to overcome inadequacies in classifications,
structures and modes of decision-making, "standardised" by IPPM systems, and thereby bring very
specific projects to fruition.
We also observed that, in certain companies, portfolios or operational classifications see their
boundaries evolve, for reasons of management capacity. We observe a fragmentation into several
portfolios and a modification of the decision-making structures when the number of projects becomes
too large. We also noticed a homogenisation of the criteria for the constitution of portfolios so that
each of them could be managed by a structure with specific skills in a domain.
281
Lastly, although two of the companies studied had constructed their portfolios or their project
classifications in accordance with the specific criteria of innovation backing, the three other companies
built their project groupings along the lines of pre-existing company structures. Instead of seeing
innovation management integrating itself into the functioning of the company, we noticed that it is
generally founded on the existing processes and structures, at the risk of losing the added value of
management by portfolio. In these cases the portfolios are often constituted around the structures that
handle or carry through the projects (Business Units or R&D Centres), in accordance with the types of
projects they contain (e.g. projects belonging to a subdivision of the company and projects common to
several subdivisions, development projects and groundbreaking projects) or in accordance with
predefined management procedures (segmentation of a portfolio between projects requiring the
intervention of such or such a management body and those requiring a different form of intervention).
CONCLUSION
The research conducted at LTS, Rhodia, Yoplait, Lafarge Mortiers and EJL, demonstrated the
following key points:
The implementation of IPPM is an organisational initiative that is still in the course of
development, initiated in a voluntary fashion, either by R&D management, anxious to obtain resources
for their operations and therefore seeking to justify their programs of projects, or by Executive
Management, with the stated aim of involving marketing staff in the process.
The number of project portfolios differs from one company to another, and can even differ within
a same company, in accordance with the overall criteria for management of the company and not
precisely the criteria for innovation management. Portfolios coexist with operational classifications,
conceptual classifications, isolated projects and innovation activities carried out without project
management.
The strategic intensity of innovation for a company is a factor that directs the degree of
formalisation of the management of the projects in the portfolios and the coherence of the
organisational solutions implemented to ensure IPPM.
The most frequently used IPPM tools are not the most sophisticated, and their role has as much to
do with learning and reflection as it has to do with assistance in decision-making.
IPPM can become a means of action on the company and its organisation. It can notably lead to a
clarification of an innovation policy or of the strategic axes, a reorganisation of the structures and
circuits of decision-making in the company.
BIBLIOGRAPHY
Akalu, M. M. (2001) Re-examining project appraisal and control: developing a focus on wealth
creation, International Journal of Project Management, 19, 375-383.
Archer, N. P. and Ghasemzadeh, F. (1999) An integrated framework for project portfolio selection,
International Journal of Project Management, 17, 207-216.
Bonhomme, Y. and Midler, C. (1999) Les outils de gestion de portefeuilles de projets dans la
pharmacie, In Séminaire ressources technologies et innovation, Les amis de l'école de Paris Paris.
Bower, J. L. and Christensen, C. M. (2000) Les technologies de rupture, saisir la balle au bond, In Les
stratégie de l'incertain Editions d'Organisation, Paris, pp. 187-217.
Calantone, R. J., Di Benedetto, C. A. and Schmidt, J. B. (1999) Using the analytic hierarchy process in
new product screening, Journal of Product Innovation Management, 16, 65-76.
Chapel, V. (1997) La croissance par l'innovation, de la dynamique d'apprentissage à la révélation
d'un modèle industriel. Le cas TEFAL., Ecole des Mines de Paris, Paris.
Cooper, R. G., Edgett, S. J. and Kleinschmidt, E. J. (1999) New product portfolio management:
practices and performances, Journal of Product Innovation Management, 16, 333-351.
Cusumano, M. A. and Nobeoka, K. (1999) Le management multi-projets: optimiser le développement
de produits, DUNOD, Paris.
De Maio, A., Verganti, R. and Corso, M. (1994) A multi-project management framework for the new
product development, European Journal of Operational Research, 78, 178-191.
Fernez-Walch, S. (1991) L'innovation de produit au quotidien en entreprise industrielle, Ecole des
Mines de Paris, Paris.
282
Fernez-Walch, S. and Romon, F. (2000) La conduite des projets innovants chez GTM: application
d'une grille d'analyse, Gestion 2000, 4, 73-86.
Gidel, T. and Romon, F. (2002) Le management de portefeuilles de projets innovants: de la gestion de
chaque projet au management d'un flux continu d'innovations pertinentes pour l'entreprise, In
Conception de produits et innovation (Ed, ENSAM, U.) UE ENSAM, Alençon, pp. 268-275.
Hatchuel, A., Lemasson, P. and Weil, B. (2002) De la R&D à la RID. De nouveaux principes de
management du processus d'innovation., In Conception de produits et innovation (Ed, ENSAM,
U.) UE ENSAM, Alençon, pp. 331-337.
Lefley, F. and Morgan, M. (1998) A new pragmatic approach to capital investment appraisal: the
financial appraisal profile (FAP) model, International Journal of Production Economics, 55, 321341.
Lenfle, S. and Midler, C. (2002) Stratégies d'innovation et organisation de la conception dans les
entreprises amont, Revue Française de Gestion, 89-105.
Loilier, T. and Tellier, A. (1999) Gestion de l'innovation, Editions Management et Société, Caen.
Mikkola, J. H. (2001) Portfolio management of R&D projects: implications for innovation
management, Technovation, 21, 423-435.
Remer, D. S. and Nieto, A. P. (1995) A compendium and comparison of 25 project evaluation
techniques. Part 1: Net present value and rate of return methods, International Journal of
Production Economics, 42, 79-96.
Romon, F. (2000) Modèle Matriciel de Management de l'Innovation (3MI): application dans les PME,
In 12ème séminaire organisations, innovation, international Compiègne, pp. 207-206.
Sarkis, J., Presley, A. and Liles, D. (1997) The strategic evaluation of candidate business process
reengineering projects, International Journal of Production Economics, 50, 261-274.
283